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The Importance of Being Trusted: Transaction Costs and Policy Network Theory
Author(s) -
Hindmoor Andrew
Publication year - 1998
Publication title -
public administration
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.313
H-Index - 93
eISSN - 1467-9299
pISSN - 0033-3298
DOI - 10.1111/1467-9299.00089
Subject(s) - transaction cost , argument (complex analysis) , negotiation , government (linguistics) , corporate governance , database transaction , relevance (law) , business , public policy , public economics , economics , public administration , microeconomics , law and economics , political science , law , finance , computer science , biochemistry , chemistry , linguistics , philosophy , programming language , economic growth
Transaction cost economics is used to defend and develop policy network theory. Networks, like markets and hierarchies, are a form of governance structure. As one form of network, policy communities develop and survive because they reduce transaction costs that would otherwise threaten the exchange of resources between government and pressure groups. Policy communities alter outcomes and should be an important part of the explanation of public policy. Whilst of general relevance, the argument is illustrated with particular reference to the frequently hostile but ultimately successful negotiations between the British Medical Association and the Ministry of Health prior to the creation of the National Health Service in 1948.